Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Turkcell Iletisim Hizmetleri AS (IST:TCELL, Financial) achieved a 7.8% year-on-year increase in top-line revenue, surpassing their guidance.
- The company maintained a strong EBITDA margin just below 42%, with EBITDA reaching TRY69.8 billion.
- Turkcell added a record-breaking 1.9 million net postpaid customers, marking the highest addition in the past 15 years.
- The company completed the sale of its Ukraine asset, contributing to a 30% increase in net income.
- Turkcell's digital business services generated TRY4.4 billion in revenue, with a 19% year-on-year rise in recurring service revenues.
Negative Points
- The mobile market remained highly competitive, with aggressive pricing dynamics persisting throughout the year.
- Turkcell experienced a 0.9 million quarterly net loss in the prepaid segment due to broader adoption of alternative data solutions and postpaid migrations.
- The churn rate increased to 2.8% due to market aggressiveness and life cycle closures.
- There is uncertainty regarding the 5G tender timeline and potential license fees, which could impact future financial planning.
- Inflationary pressures and rising funding costs have affected EBITDA margins, reducing them by 3.4 percentage points.
Q & A Highlights
Q: What is Turkcell's view on the timeline and potential investment size for the 5G tender?
A: Ali Taha Koc, CEO, stated that there is no official timeline for 5G announced by the regulatory body yet, but a tender is expected in 2025 with a live network in 2026. Turkcell is committed to establishing its 5G infrastructure using local technologies and is preparing for the tender. The company is also focusing on fixed wireless access solutions to enhance broadband connectivity where fiber is not available.
Q: Can you provide insights into Turkcell's growth prospects and financial expectations for the coming years?
A: Kamil Kalyon, CFO, mentioned that Turkcell achieved an 8% growth rate in 2024, which is significant given the inflationary environment. For 2025, the company targets a 7% to 9% growth rate. The focus will be on maintaining a balance between growth and cost management, with expectations to keep net leverage below the industry average.
Q: How does Turkcell plan to maintain EBITDA margins amidst inflationary pressures and competition?
A: Kamil Kalyon, CFO, emphasized that Turkcell has a strong track record in cost management and inflationary pricing. The company increased its EBITDA margin by 1% in 2024 and plans to continue focusing on cost efficiency and diversified revenue streams, including techfin and data center businesses, to maintain margins.
Q: What are Turkcell's plans regarding the 2025 Eurobond maturing in October?
A: Kamil Kalyon, CFO, explained that Turkcell issued a $1 billion Eurobond in January to prepare for the redemption of the Eurobond maturing in October 2025. The remaining funds will support 5G investments, data center expansions, and renewable energy projects.
Q: What is Turkcell's approach to pricing and salary adjustments in light of inflation?
A: Ali Taha Koc, CEO, stated that Turkcell follows an inflationary pricing strategy and adjusts prices accordingly. For salaries, the company typically makes annual adjustments, but in 2024, it made two increases due to inflation. For 2025, only one salary increase is planned, but this may change depending on inflationary trends.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
